Repeal Prop 218

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

The drought has done at least one good thing – it’s shined a spotlight on Prop 218.

Specifically, a court’s decision to block a tiered-pricing scheme for water in one Orange County community – as a violation of Prop 218 – is responsible for the attention. Gov. Brown criticized the decision as limiting the flexibility of local government. In response, Prop 218’s defenders have noted that Prop 218 permits tiered pricing as long as such pricing is justified and meets Prop 218 requirements that it is tied to the cost of providing water to homes.

But the story of Prop 218 is much bigger than water pricing and drought. It’s the story of a 19-year-old constitutional ballot initiative that undermines local democracy and fiscal accountability. It’s one of the lesser-known of the many California rules that limit local rule – and the accountability that comes with it.

Prop 218 was an attempt by Prop 13’s backers to protect that measure; they saw local governments finding ways to raise revenues despite Prop 13, and so they wanted to impose new limits on local government, requiring voters to approve various kinds of taxes and fees that involve property owners. Some of the language of Prop 218 was vague, and we’re still fighting over – including in the water-pricing case – what Prop 218 actually means.

And that lack of certainty is itself a strong argument against the measure.

Joel Fox, a Prop 218 defender, even cited an LAO document on the initiative recently at this site. He did not quote from the same document, where the LAO said it had to discuss Prop 218 “as we understand it.” The LAO went on: “Proposition 218’s requirements span a large spectrum, including local initiatives, water standby charges, legal standards of proof, election procedures, and the calculation and use of sewer assessment revenues. Although the measure is quite detailed in many respects, some important provisions are not completely clear.”

Now, of course, local governments haven’t stopped trying to raise revenues, even though Prop 218 provided new limits on their discretion. They’ve gone to voters, sometimes with success, and they’ve gone into the dark corners still left to them. Many of those revenue strategies – like redevelopment agencies, now abolished – were deeply problematic in themselves, and have abetted corruption of the type we saw in Bell.

But the real problem with 218 is that it takes power away from local elected officials in a dangerous way – by making them spenders, and preventing them from being taxers. The problem with that is that, when local officials don’t have to raise funds to pay for services, they have a tendency to overspend – and then point the finger at the state or others when money runs short. It’s this dynamic that has ballooned pension spending – local officials can give big pensions to cops, but don’t have the power to raise taxes to pay for those pensions.

Taxing and spending for programs should be at the same level.

In the current tax reform discussion, there’s been quite a bit of conversation about going back to this principle – of giving local and regional governments more power to raise their own revenues for the programs they administer. That’s a good idea. An even better idea would be to repeal Prop 218 – and strip away the various other measures that lock in tax and spending policy, and thus rob today’s voters of their democratic power.

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